The agreement marks the next phase of the company’s expansion into the defence consumables segment following its onboarding into the NATO supply chain and commercialisation of its empty shell production line. The MoU has been signed with a NATO-affiliated entity, though the end user’s name has not been disclosed due to confidentiality and the sensitive nature of the supplies.
Under the agreement, Balu Forge will supply 30,000 units per month of 155 mm M107 shells and 10,000 units per month of 152 mm shells in ‘Ready to Fill’ condition, for a period of five years starting 25 February 2026. Supplies are scheduled to commence from April 2026 and will be ramped up in a phased manner.
The contract also covers the broader large-calibre ammunition category, including 155 mm ERFB/BT and 152 mm variants, with potential expansion to 105 mm, 120 mm and 81 mm shells at a later stage, subject to trials and approvals.
The agreed price is $315 per unit for both 155 mm M107 and 152 mm shells, indexed to the London Metal Exchange to account for fluctuations in raw material prices. The terms are on an FOB Nhava Sheva basis. Payment terms include 20% advance, with the balance payable through an irrevocable letter of credit within 30 days from invoice issuance.
The committed volumes exceed the company’s current installed capacity of 360,000 units per annum. However, Balu Forge said it has plans in place to enhance production capacity through internal accruals to meet the order requirements.
The company stated that the agreement aligns with its strategy to build a strong presence in the defence consumables space, beginning with large-calibre ammunition and gradually expanding into medium- and small-calibre segments.
Balu Forge Industries is a precision engineering company delivering forged and machined components across multiple global industries. The company offers a comprehensive product portfolio, supporting diverse applications in automotive, industrial vehicles, earthmoving equipment, wind energy, aerospace, defence, oil and gas, railways, marine, and agriculture.
The company’s consolidated net profit jumped 20.5% to Rs 71.09 crore on 21.6% increase in revenue from operations to Rs 311.11 crore in Q3 FY26 over Q3 FY25.